Training for Senior Executive Management

Internal Control ProgramRev. 1/26/15

Presentation Objectives

Increase awareness of the internal control program.

Communicate benefits and importance of an effective internal control program.

Promote support for the internal control program.

NYS Internal Control Act“In 1987, the Legislature enacted a law entitled New

York State Governmental Accountability, Audit and Internal Control Act of 1987. This act highlighted the

need for agency management to promote good internal controls and accountability in government…”

(Office of the State Comptroller)

Why internal control?

IC Act Requirements• Maintain written internal control

guidelines

• Maintain an internal control system for continuous review of operations

• Make concise statement of policy and standards available to all employees

• Designate an Internal Control Officer

• Educate and train all employees on internal control

The annual Internal Control Certification establishes campus’ level of compliance with the IC Act

Internal Control Definition“Internal control is a process effected by an entity’s board of directors, management,… designed to provide reasonable assurance regarding the achievement of objectives…”

(COSO, 2013)

What is internal control?

Internal Control Benefits

Prevent loss of

funds or other

resources

Reduce opportunities for fraud

Preserve integrity

Establish standards of performance

Support the achievement of

campus objectivesProtect all employees

Discouragebad

publicity

Ensure compliance with laws, regulations, policies, and procedures

Ensure public

confidence

Understanding Internal ControlIn order to achieve an effective internal control, SUNY incorporates the standards

of COSO Internal Control Framework adopted by the Office of the State Comptroller as five integrated components.

(SUNY Internal Control Policy, June 2014)

CONTROL ENVIRONMENTComprises the integrity and

ethical values of the

organization.

Set of standards, processes, and structures that

provide the foundation for

internal control.

The resulting control

environment has a pervasive

impact on the overall system of internal control.

The Tone at the Top established by

senior management regarding the importance of

internal control.

First Component

Tone At The Top

•Heads of campus major organizational units (e.g., VP’s, deans, directors) are responsible for the internal control effectiveness within their units.

Senior Management

•The president delegates operational responsibility to ensure successful implementation of the campus internal control program to an appointed ICO.

Internal Control Officer

•The president has the ultimate responsibility for the adequacy of the campus internal control system in compliance with the Internal Control Act.

President

RISK ASSESSMENT

Identifying, analyzing, and evaluating risks.

Risk monitoring and control

Customizing risk response

Second Component

CONTROL ACTIVITIES

Actions established

through policies and procedures

Preventive or detective in

nature, and may encompass a

range of manual and automatic

activities

It ensures that management’s

directives to mitigate risk to the

achievement of objectives are

carried out Approvals

Authorizations

Verifications

Operations Performance

Review

Segregationof Duties

Third Component

INFORMATION & COMMUNICATIONQuality reports

Open-door management

policy

Accesible channels for

reporting wrongdoing

Internal control responsibilities

clearly communicated

Timely information

Fostering a culture of

ethics

Fourth Component

MONITORING ACTIVITIES

1. Evaluate internal control deficiencies

2. Analyze findings

3. Communicate deficiencies

EXECUTIVE MANAGEMENT

LINESTAFF

MIDDLE MANAGEMENT

Fifth Component

Internal Control Program

•Supporting units by creating awareness of the benefits e importance of Internal Control

•Evaluating deficiencies in internal controls and conducting periodic testing

•Assessing risks and evaluating vulnerabilities that threaten the achievement of objectives

•Fostering a culture of accountability, responsibility and ownership in the day to day work activities

Action Plan

Campus Objectives

Supporting the Internal Control Function

Committing to support the internal

control program

Supporting the president’s tone-at-

the-top message within each unit.

Setting up periodic staff meetings within

their units

Participating at the Internal Control

Steering Committee.

Promoting adherence to established policies and

procedures within each unit.

Communicating the benefits and

importance of the internal control

program

Internal Control Training for Senior Executive

Management

Thank youRev. 1/26/15